American Axle Threatens To Hire Replacement Workers
Dow Jones

DETROIT -(Dow Jones)- American Axle & Manufacturing Holdings Inc. (AXL) threatened to hire replacement workers, increasing tensions in a more than month-long strike that has crippled pickup truck and sport-utility vehicle production at General Motors Corp. (GM)

The Detroit axle supplier ran ads over the weekend in local newspapers looking for workers "to fill anticipated attrition replacement openings after negotiations or in place of employees involved in this strike."

About 3,650 American Axle workers represented by the United Auto Workers walked off the job Feb. 26 at five plants in Michigan and New York in a dispute over wages and benefits. Progress in the talks has been slow. The walkout has affected production at 30 GM plants, including Monday when the auto maker closed its first car assembly plant in Michigan.

American Axle spokeswoman Renee Rogers said the ad was primarily to start filling positions in anticipation of UAW employees taking buyouts or early retirements. Any deal with the union is expected to include those provisions.

But she also said it's possible they could be used to "temporarily replace current striking workers."

If American Axle were to produce parts for GM with temporary replacement workers, it could put the auto maker in a difficult position, said Harley Shaiken, a labor professor at the University of California Berkeley.

"The problem is that they are a supplier to one of the largest unionized auto makers and this could create real tensions between the UAW and GM," he said. "If American Axle is not trying to inflame things, this is the wrong strategy."

That tension, Shaiken said, could threaten GM's turnaround plan. While GM's UAW workers may be barred contractually from refusing to use American Axle parts made by temporary replacement workers, the union could cause the auto maker difficulties in other areas.

GM, which reached a new four-year labor agreement with the UAW last year, is still working with the union to implement different portions of the contract such as changes in work rules.

"GM has relied on the UAW cooperation to help it remain competitive," Shaiken said. "It's critical that the relationship isn't harmed."

GM spokesman Dan Flores wouldn't comment on American Axle's potential use of temporary replacement workers.

"This is a dispute between American Axle and the UAW," he said. "We're not going to speculate on what may or may not happen."

UAW spokesman Roger Kerson didn't return a phone call seeking comment.

GM has said it expected the strike to have an effect on its first-quarter earnings, but wasn't overly concerned. The dispute has affected production of pickup trucks and SUVs, products on which GM had heavy inventories.

But now the strike's effects are starting to widen and have spread to car production. The plant GM idled Monday produces the Buick Lucerne and Cadillac DTS sedans.

GM will have to shut production by mid-April of its hot-selling Chevrolet Malibu if American Axle can't end a strike by the UAW, a UAW official said Monday, according to a report by trade publication Automotive News. Mike Dunn, shop chairman of UAW Local 5960, which represents workers at the Orion, Mich., plant, said the Orion plant and another in Kansas City, Kan., are being hurt by a lack of American Axle parts.

GM shares gained 2% to finish Monday at $19.05. The stock is down 23.5% so far this year amid concerns about the company's ability weather a downturn in U.S. sales.

-By Terry Kosdrosky, Dow Jones Newswires; 248-204-5532; terry.kosdrosky@

-By Jeff Bennett, Dow Jones Newswires; 248-204-5542;

  (END) Dow Jones Newswires
  03-31-08 1901ET
  Copyright (c) 2008 Dow Jones & Company, Inc.
 Top of page